Those "record" Home Sales in May......

[F.Gordon]

You may have heard about it. The media and every set of RW chattering teeth have talked about it.

Below is the actual "disclaimer" from the Commerce Dept. on these figures. It's all smoke and mirrors boys and girls. Complete bullshit. I also read today that even those that are biased (the economy is doing fantastic!) feel that new housing has peaked. We've reached the top. Wonder where it goes from here?

EXPLANATORY NOTES
These statistics are estimated from sample surveys. They are subject to sampling variability as well as nonsampling error including bias and variance from response, nonreporting, and undercoverage. Estimated average relative standard errors of the preliminary data are shown in the tables. Whenever a statement such as “2.5 percent (±3.2%) above” appears in the text, this indicates the range (-0.7 to +5.7 percent) in which the actual percent change is likely to have occurred. All ranges given for percent changes are 90-percent confidence intervals and account only for sampling variability. If a range contains zero, it is uncertain whether there was an increase or decrease; that is, the change is not statistically significant. The same applies to the confidence intervals for percent changes shown in the tables. Changes in seasonally adjusted statistics often show irregular movement. It takes 6 months to establish a trend for new houses sold. Preliminary new home sales figures are subject to revision due to the survey methodology and definitions used. The survey is primarily based on a sample of houses selected from building permits. Since a “sale” is defined as a deposit taken or sales agreement signed, this can occur prior to a permit being issued. An estimate of these prior sales is included in the sales figure. On average, the preliminary seasonally adjusted estimate of total sales is revised about 3 percent. Changes in sales price data reflect changes in the distribution of houses by region, size, etc., as well as changes in the prices of houses with identical characteristics.

http://www.census.gov/const/newressales.pdf

Just a friday FYI....I really need to get some work done today.....later.

[Frodo]

1. That's not really true.

The disclaimer certainly doesn't say that it's all "smoke and mirrors". You're basically discounting the housing report itself... not just this months.


YES, the housing market is peaking... but that could happen any time in the next several months. Soem realty experts actually expect to hit 7Million before it slowly comes back down. Housing just doesn't change as quickly as the stock market.

Rising rates (or more specifically, the EXPECTATION of rising rates, since mortgages are still quite low) are causing people to jump off the fence. If you're even THINKING about buying a house...NOW is the time to do it - because the same house is likely to "cost" (in monthly terms) quite a bit more very soon. This couls "artificially" keep demand up for as much as another year depending on how fast rates move.

[F.Gordon]

2. Why, yes I am........

You're basically discounting the housing report itself... not just this months.

I won't get into the political side of this, which is the cozy relationship the GOP has with the National Home Builders Association. I won't discuss the lobbying efforts of the NHBA to obtain "welfare" subsidies for building in rural areas. Let's just discuss the "facts" at this point.....

This "report" by the Commerce Department is nothing more than an estimate based on selected surveys.

1. The inventory rate stated is at least 25% lower than actual high volume market areas. They blend in low volume or inactive markets with the markets that are actually generating the volume. 3.1 or 3.3 months doesn't sound too bad, but it's actually (in real life) more like 4.3 or 4.5 months. It also doesn't factor in housing sales that are "on hold"...that haven't even been started yet.

2. It doesn't factor in a weighted statistic based on biased builders using under construction/anticipated contract sales.

3. It doesn't take into account the current attrition rate, and it doesn't take into account that builders are "double" reporting sales because of high attrition numbers. You sound like you might be "in the biz"....with your BUY NOW sales pitch in your post. If so, tell me what your closing rate is today compared to even just two or three years ago.

I'll leave you with that for the time being (I have much more if ya' want to discuss it later....)

Bottom line is that I'll stick with my "smoke and mirrors" and "complete bullshit" analysis of this report. It's not like the bush* administration would EVER pressure the commerce department to skew the numbers or anything like that. No, not them.

Oh, and I disagree with your BUY NOW suggestion. If you are "in the biz" then I respect your reasoning...want to keep your job and all...nothing wrong with that. I'm in sales myself, so I understand that shit. But...it's bad advise. The new housing market is being held up by a thinly stretched rubber band right now, and it won't take much to break that rubber band.

Hey! Thanks for posting, and sorry I took so long to get back at ya'. Take care...